kumble_rocks Posted July 8, 2007 Share Posted July 8, 2007 how this broker thing works.... on second thought i will do some research before bugging you guys with stupid questions Jesus Mate ! You got your priorities all wrong .:P Screw Islamists , get yourself discount broker like Etrade or ameritrade. Motley fool guys are pretty cool. I learned a lot from them. http://www.fool.com/ Link to comment Share on other sites More sharing options...
Bumper Posted July 8, 2007 Share Posted July 8, 2007 in case of stocks i have just invested in my company's stocks only. I would love to hear investing pointers from your side. Which company have you opened account with for trading? First rule of thumb. Dont put all your eggs in one basket. Dont wanna scare u, but if i were u i'd never do that. Already so much of your livelihood depends on your company's fortunes. Your job, your 401K, your stock options, your ESPP etc. Investing further in your company is adding more to that dependency. No single company is that good, not even google. If i were u, i would sell and diversify. Link to comment Share on other sites More sharing options...
Ram Posted July 8, 2007 Share Posted July 8, 2007 I do everything. I have my big investments in mutual funds. (Fairly aggressive funds with atleast 25-30% returns). I get in & get out of stocks as i see fit. I mostly stick to tech stocks & very rarely venture into non tech (such as energy) For trading, i deal only with options mostly spreads. Currently the market is bullish, hence bull spreads have been working well for me. . Tech has always been a safe bet. But I am bit surprised you arent into energy. With oil prices so high , the companies have been racking bumper ( :haha:) profits. Companies like GE energy surely have a long term. Wouldnt you venture into them , if given a chance ? As i said i keep all my long term investments in mutual funds. Thats the best way to play long term investments IMO, as individual stocks can fall any time on a bad news and wipe out your gains. I have the below funds: LETRX, UNWPX, DODFX, BRSVX and EWZ (ETF) to name a few. . Which is precisely the reason having a portfolio of different sector of stocks acts like a soft-landing doesnt it ? Even if one group of stocks lets you down badly , the other sectors can prop you up a bit cant it ? Buy low & sell high is bull dust. People who claim to be using such a strategy are just lying thru their teeth, as no one has such a crystal ball for the markets. No one really knows which way the market will move tomorrow. Good traders hedge their plays in such a way that probability is with them. Learning to trade with discipline is easier said than done. I learnt things the hard way (= losing real money). It takes a few years of painful losses to perfect the art. . I have seen retail investors follow a plan where they wait till their stocks appreciate till a point , and sell, irrespective of where they think its going. At the least , your profit is booked, though you probably keep a portion of the stocks in case the it kept on appreciating , but u got your return guarenteed with ones you sold. Link to comment Share on other sites More sharing options...
Bumper Posted July 8, 2007 Share Posted July 8, 2007 Tech has always been a safe bet. But I am bit surprised you arent into energy. With oil prices so high , the companies have been racking bumper ( :haha:) profits. Companies like GE energy surely have a long term. Wouldnt you venture into them , if given a chance ? I dont own energy stocks now. I used to trade TNT & PBR (oil bellwethers) long time back, when oil was $50 a barrel. Which is precisely the reason having a portfolio of different sector of stocks acts like a soft-landing doesnt it ? Even if one group of stocks lets you down badly , the other sectors can prop you up a bit cant it ? Which is what mutual funds do. Mutual funds provide 3 things for an small scale investor: a) Diversification (diversification over 100 stocks). You cannot buy 100 stocks with even a 10K investment b) Dividends/Profit sharing: Many mutual funds pay upto 3-5% of your portfolio in dividends and other payouts. c) Full time money manager: This dude is paid to watch your money. His fortunes depend on the performance of the fund. The challenge is to find the right funds. With a plethora of online tools, u can easily find the best funds for your risk/reward requirements I have seen retail investors follow a plan where they wait till their stocks appreciate till a point , and sell, irrespective of where they think its going. At the least , your profit is booked, though you probably keep a portion of the stocks in case the it kept on appreciating , but u got your return guarenteed with ones you sold. Correct. Thats what i call trading with discipline. You need to have clear entry & exit strategies for each position. Link to comment Share on other sites More sharing options...
Ram Posted July 8, 2007 Share Posted July 8, 2007 Some excellent insights there. Thanks. Also do you agree with the common perception that many of the tech-sectors stocks ( like google) are over-valued and may face a correction soon ? I do feel energy is the stock of the future, not necessarily oil companies , but companies which work on renewable tracks of energy. Many govts hae made it a policy ecision to invest more in renewables. They are just starting out. We could be seeing the tip of the ice-berg here. Also infrastructure is good bet I feel. Your point of mutual funds being the best method for entry level investors is a valuable point though. Thanks again ! Link to comment Share on other sites More sharing options...
Bumper Posted July 8, 2007 Share Posted July 8, 2007 Some excellent insights there. Thanks. Also do you agree with the common perception that many of the tech-sectors stocks ( like google) are over-valued and may face a correction soon ? Google is not over-valued. It is still under valued for their growth. But you cannot buy much of google as a small scale investor and i wouldnt advise buying and holding an individual stock either. (It just takes one or two bad news to wipe out all your gains). If you do buy individual stocks, you should be prepared to get in and get out of them frequently for which u need the right tools. I'd use stocks like google for trading not as one to buy and hold. I do feel energy is the stock of the future, not necessarily oil companies , but companies which work on renewable tracks of energy. Many govts hae made it a policy ecision to invest more in renewables. They are just starting out. We could be seeing the tip of the ice-berg here. I dont understand this territory well. Even if i do, it'll be hard to tell which ones will last & which ones wont. Best tactic is to buy oil ETFs or oil funds such as ICENX. They spread your money across 100s of oil stocks. You get to play the vertical market (oil) as well diversify yourself from risks Link to comment Share on other sites More sharing options...
apocalypse Posted July 8, 2007 Share Posted July 8, 2007 First rule of thumb. Dont put all your eggs in one basket. Dont wanna scare u, but if i were u i'd never do that. Already so much of your livelihood depends on your company's fortunes. Your job, your 401K, your stock options, your ESPP etc. Investing further in your company is adding more to that dependency. No single company is that good, not even google. If i were u, i would sell and diversify. dont worry. I know that rule. I am a recent starter. So gradually I will diversify my investments. Thanks for tips. Link to comment Share on other sites More sharing options...
kumble_rocks Posted July 8, 2007 Share Posted July 8, 2007 Google is not over-valued. It is still under valued for their growth. Doesn't PEG ratio mean anything anymore. I remember the good old days when we were thought in our investment classes that PEG ratio should be less than 1. Even after 5 years with it's present growth rate , Google may not have PEG ratio less than 1 . Then how is it undervalued. Same with MSFT. Me thinks most tech companies are overvaued. Link to comment Share on other sites More sharing options...
Bumper Posted July 8, 2007 Share Posted July 8, 2007 KR, look at yahoo's PE (53) & Google's (46). Google is growing its profits at 70-80% at a $12 Billion run rate. Google's fwd PE (the most important factor) is 27. CHEAP! No company in the US history has grown so big, so fast. For its growth rate, Google deserves a multiple of atleast 60 Link to comment Share on other sites More sharing options...
Ram Posted July 8, 2007 Share Posted July 8, 2007 What are the typical P/E of other sector stocks ? Like banking , telecom ? that will give us a fair idea of where google or other tech companies stand , interms of being either over or undervalued. Link to comment Share on other sites More sharing options...
Bumper Posted July 8, 2007 Share Posted July 8, 2007 What are the typical P/E of other sector stocks ? Like banking , telecom ? that will give us a fair idea of where google or other tech companies stand , interms of being either over or undervalued. Banking industries grow by 5-10% max, hence PE's of 10 or less are typical. Telecom industries (depends on the specific company) range anywhere between 20 & 40 Forget the sector a company reporting a top line growth of 70% deserves atleast a PE of 60 Link to comment Share on other sites More sharing options...
Ram Posted July 8, 2007 Share Posted July 8, 2007 Banking industries grow by 5-10% max, hence PE's of 10 or less are typical. Telecom industries (depends on the specific company) range anywhere between 20 & 40 Forget the sector a company reporting a top line growth of 70% deserves atleast a PE of 60 But that is the point. No company can sustain a growth of 70% over a period of time. Google has had the advantage of being the first mover in many areas, which has helped them to have a head-start. But , when the competiton does catch up ( which it will) , things will get harder for google. So when Google's profit does stabilise , then is there a possibility that the stock may correct ? Just wondering. Link to comment Share on other sites More sharing options...
Bumper Posted July 8, 2007 Share Posted July 8, 2007 Google always had competitors. Yahoo was infact the pioneer in search & search sites were dime a dozen before Google even began. Google's threat is not competition but the overall strength of the industry (which looks good now). If the economy turns south, as it did back in 2000, Google would be hurt as it is not diversified enuff (95% of their moolah comes from their ad-words product (search)). I dont see anything else stopping this 800 pound gorilla of search Eric Schmidt and his boys believe Google's growth is sustainable. The ad industry in the US is big. Its close to a $80B ndustry. Only part of that is on the net today (big chunk of it is TV based). The bet is that in the future the internet share of ad money will grow, as more and more people spend increasing amt of time on the net (and likely less on TV). Link to comment Share on other sites More sharing options...
ludhianvi Posted July 9, 2007 Share Posted July 9, 2007 very good thread. yeh stacks ka bijnus mujhe bhi sikhna hai. Link to comment Share on other sites More sharing options...
Guest dada_rocks Posted July 9, 2007 Share Posted July 9, 2007 Some very very useful info there.:thumbs_up: Link to comment Share on other sites More sharing options...
The Outsider Posted July 9, 2007 Share Posted July 9, 2007 I had bought some Apple shares a couple of months back with the iPhone release in mind. Have yielded a good return. Link to comment Share on other sites More sharing options...
ludhianvi Posted July 9, 2007 Share Posted July 9, 2007 Iam really a noob in this area. So where do I begin from? How do you guys stocks, mutual funds, bonds from? Websites or local banks? He He, you can tell I am really new to this. Do you always need a person to sell to? What if nobody wants to buy that stock, i.e company totally fails like Nortel (not a good example) Link to comment Share on other sites More sharing options...
apocalypse Posted July 9, 2007 Share Posted July 9, 2007 Iam really a noob in this area. So where do I begin from? How do you guys stocks, mutual funds, bonds from? Websites or local banks? He He, you can tell I am really new to this. Do you always need a person to sell to? What if nobody wants to buy that stock, i.e company totally fails like Nortel (not a good example) are you working? do you have a family/kids? sounds absurd but just asking if u dont mind Link to comment Share on other sites More sharing options...
Guest dada_rocks Posted July 9, 2007 Share Posted July 9, 2007 How safe is mutual funds under the heading international-stocks. It must be riskier because this one quotes the highest return in my bank. Link to comment Share on other sites More sharing options...
apocalypse Posted July 9, 2007 Share Posted July 9, 2007 How safe is mutual funds under the heading international-stocks. It must be riskier because this one quotes the highest return in my bank. The risk level of international stocks is quite high as predicted by sites like www.fool.com You should see the ratings of that fund on Morningstar.com Link to comment Share on other sites More sharing options...
Recommended Posts